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Supreme Court to hear another arbitration argument

•  Recent Cases     updated  2011/05/02 08:59


The Supreme Court will consider a plea from companies that cater to people with bad credit to keep disputes with their customers out of court and in the more business-friendly forum of arbitration.

Days after handing businesses a huge victory by limiting class action claims against them, the court said Monday it will take up a new arbitration dispute in the fall.

The new case involves consumer complaints about companies that issue low-rate credit cards to people with bad credit ratings. The consumers said they were promised an initial $300 in available credit, but were charged $257 in fees in the first year they had the credit card.

The consumers sued in federal court, but the companies say the dispute must be handled by an arbitrator, under an agreement the customers signed to receive the card.

The federal Credit Repair Organizations Act, signed by President Bill Clinton in 1996, says consumers have a right to sue, which the federal appeals court in San Francisco interpreted as a right to go into court, rather than be forced to submit to arbitration. Appeals courts in Atlanta and Philadelphia have ruled otherwise in evaluating the same language in the law.


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